US & Canada: healthcare dissimilarities

Rich dad, poor dad

Barack just needs to look to his neighbours to understand health policies

That America has not done as well in supporting health issues over the years is a given fact. But how bad is ‘not done as well’? The answer is pretty bad. Not many would know that in the US, the incidence of cancer among males and females is 562.3 and 417.3 per 1,00,000 respectively (American Cancer Society, Surveillance and Health Policy Research, 2009), life expectancy is 77.8 years, infant mortality rate is 6.9 deaths per 1,000
live births (CNN once reported that the US has the second worst newborn death  rate in the modern world), mortality rate under the age of five years for males and females is 9 and 7 per 1,000 live births respectively, only 2.7 acute care beds per 1,000 people are available (5th worst amongst all OECD nations), 2.8 physicians per 1,000 and ranks 72nd by overall level of health on WHO parameters!

Perhaps today, the biggest issue in the US is the failure of its healthcare system, especially given the debate on Obama’s policy decisions. Though Obama is not labelled a failure, yet when it comes to healthcare reforms, it might not take too long for his 300+ million supporters to ‘change’ their point-of-view. One need not travel miles to prove what ails the States. Their next door neighbour – Canada – is a case in point, or rather, against the point. Canada has a healthcare model that is better; because it works!

Even after having a US-like healthcare model, Canada has successfully achieved better results in its healthcare report card. Healthcare spending in Canada is around $160 billion or 10.1% of its GDP in 2007, which is one percentage point higher than the average spending by OECD countries. But very interestingly, it is far lower than the US allocation, which is 16% of GDP. Canada also spends lesser on a per capita basis compared to the US. Canada’s total healthcare per capita spending was around $3,895, which is lower than the $7,290 per capita spending of the US. The critical reason why the system, despite spending less, works better in Canada is that while the public sector is the main source of funding for Canadian healthcare, the US system is dependent on private source funding.

In the year 2007, 70% of healthcare spending in Canada was through public sources (which, though, has decreased from 74.5% in 1990), while in the US, the same was 45% (the lowest among all OECD countries). Unbelievably, this happens despite the fact that the Canadian government spends a lesser amount (16.7% of its revenue) on its citizens’ health than the US government (which spent 18.5% of its revenues last year). Surprisingly, in spite of such gigantic healthcare spending in the US, a whopping 40% of the US citizens lack adequate accessibility to the country’s healthcare system (24% of the US population remained under-insured, according to the Consumer Reports Study, 2007), while with relatively lower investments, only 5% of Canadians are outside the system.

It is also astounding to observe that simply having more doctors, physicians and nurses doesn’t ensure a high quality of health service. Canada has fewer physicians per capita than in most other OECD countries (In 2007, it had just 2.2 practicing physicians per 1,000 people, lesser than the 2.8 physicians per 1,000 population in the US). Canada has 9 nurses per 1,000 people, while the US has 10.6 nurses per 1,000. Canada also ranks as worse as the US in the number of acute care beds per 1000 people (2.7). Look at where that has brought Canada. Canadians have an average life expectancy of 80.4 years according to the Canadian Institute of Health Information (US: 77.8). Infant mortality rate also has come down drastically to 5 deaths per 1,000 live births (US: 6.9). Adult smokers consuming tobacco products has gone down from 34% in 1980 to 18% in 2007 through an effective public awareness campaign, advertising ban and taxation moves. In Canada, 15% of its population is obese, far below the US, which has 34.3% of its population afflicted by obesity (OECD health data). Experts comment that patented drug prices are 35% to 45% lower in Canada than in the US. Some US citizens now even purchase prescription drugs from Canada (many using online transactions) than from their home country – this cross-border purchasing has been estimated at $1 billion.

Where’s the learning in all this? A key concept that the US government could start with is that the Canadian government centrally sets the guidelines for healthcare and ensures they are uniform throughout the country. Moreover, the government ensures that the system is non-discriminatory, both qualitatively – in terms of treatment – and quantitatively – in terms of pricing. According to a recent news analysis by Financial Times, a heart bypass operation that would cost some $1,30,000 in the US costs $24,600 at Bumrungrad at Bangkok – and even when airfares and a two-week holiday/recuperation period are factored in, it is still almost 80% cheaper.

Barack Obama might do well to read a relatively newer study published in The American Journal of Medicine, which says that medical debt is the principal cause of personal bankruptcy in the US, and its impact on weakening the whole economy should not come as a surprise.

The Presidential Tracking Poll published by The Rasmussen Reports shows how now, “the number who Strongly Approve [of Obama] has fallen from 43% in January to 30% in August. During that same time frame, the number who Strongly Disapprove has grown from 20% to 39%. Those numbers translate to a Presidential Approval Index that has declined from +23 in January to -9 in August 2009.” That’s the lowest ever recorded for Barack Obama, once considered and talked of in the same breath as Lincoln and Roosevelt. But those ratings are still better than Bush’s, who – in the final month of his job – had only 13% saying they ‘Strongly Approved’ of him, and 43% saying they ‘Strongly Disapproved’ (Bush ended up getting a negative Presidential rating of -30).

This is not to say his health policy commentaries are wrong, but to say that clearly, Barack Obama does have an incredible lot of distance to cover on healthcare. Some mention the distance is 498 miles... from Washington to Ottawa.